Lenders had been banned from enforcing out-of-state forum selection clauses and class action waivers in loan agreements because such conditions violate Georgia’s general general public policy, the Eleventh Circuit held in Davis v. Oasis Legal Finance working Co., 2019 WL 4051592 (11th Cir. Aug. 28, 2019). A course of borrowers whom joined into identical loan agreements sued their loan providers, alleging that the agreements violated Georgia’s Payday Lending Act, O.C.G.A. § 16-17-1 et seq., Industrial Loan Act, O.C.G.A. § 7-3-1 et seq., and usury guidelines, O.C.G.A. § 7-4-18. Lenders 
Lenders argued that the Payday Lending Act might be interpreted to allow non-Georgia forum selection clauses since the Act failed to especially need disputes to be introduced a Georgia county, it merely so long as disputes must certanly be fixed in a “county when the borrower resides or perhaps the mortgage workplace is based.” (emphasis included). The court disposed with this argument, reasoning that Georgia location conditions frequently utilize the basic term “county” whenever discussing Georgia counties. As well as the lenders’ argument made little sense based in the Act’s clear prohibition on out-of-state forum selection clauses.
For a couple of reasons, the court additionally rejected the lenders’ argument that the Payday Lending Act doesn’t connect with loans by out-of-state loan providers. First, the Georgia Supreme Court has recently refused this argument. 2nd, the statute broadly is applicable to“any continuing business” that “consists in entire or perhaps in element of making . . . loans of $3,000.00 or less.” 3rd, if this argument held water, it might render the Act’s prohibition on out-of-state forum selection clauses meaningless.
Then, the court addressed the course action waiver. It consented with all the region court’s conclusion that the Georgia Legislature designed to preserve course actions as an answer against payday lenders—both statutes expressly allow course actions. Enforcing the class action waiver would undermine the point and nature of Georgia’s scheme that is statutory. This, alone, had been adequate to make the course action waiver unenforceable under Georgia legislation.
So that they can persuade the court otherwise, lenders pointed to prior Eleventh Circuit cases—Jenkins v. First American Cash Advance of Georgia, LLC, 400 F.3d 868 (11th Cir. 2005), and Bowen v. First Family Financial Services, Inc., 233 F.3d 1331 (11th Cir. 2000)—which held that class action waivers in arbitration clauses are not void as against general general public policy. The court had not been convinced, emphasizing that Jenkins and Bowen class that is involved waivers in arbitration agreements. Consequently, the Federal Arbitration Act applied and created a good federal policy in benefit of arbitration. More over, Supreme Court precedent establishes that area 2 of this Federal Arbitration Act overrides state statute or common-law doctrine that attempts to undercut the enforceability of a arbitration contract. Because an arbitration contract wasn’t at problem right here, the court explained, Jenkins and Bowen are distinguishable plus the Federal Arbitration Act will not use.